FIXED INCOME MARKETS
Money Markets
Opening system liquidity settled at ₦513.33 million long, compared with ₦430.12 million recorded yesterday. Nonetheless, the Open Repo Rate (OPR) and Overnight Rate (O/N) increased by 167bps and 200bps to 2.71% and 3.42%, respectively.
Outlook: We expect rates to trend higher tomorrow, as market players fund for tomorrow’s FGN bond auction settlement.
Treasury Bills
The treasury bills market was relatively quiet today, with mild activity observed across the mid and long tenors. Overall, the average mid-rate remained unchanged at 3.98%.
Outlook: We expect a similar trend tomorrow.
FGN Bonds
The local bonds market was slightly mixed to bearish, with the bulk of activity skewed to 2038 and 2053 papers, as investors traded sideways following yesterday’s oversupply at the FGN bonds auction. Nonetheless, there were few demands for 2042 and 2049 papers, thus causing the overall average mid-yield to dip by c.2bps to 12.71%.
Outlook: We expect market to remain calm tomorrow.
Eurobonds
The Eurobonds market traded sideways on Nigeria’s curve and other SSA papers, although, with lesser volatility. Average yield inched up by 2bps to settle at 10.26%. Meanwhile, the International Monetary Fund (IMF) approved c. $1 billion for Kenya, with an immediate disbursement of $415.4 million, and widened the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) arrangements to 48 months from 38 months, as the country continue to implement economic reforms and confront challenges with climate change.
Outlook: We expect the mixed bias to resurface tomorrow.
Equities
The Nigerian’s bourse closed on a positive note today, as the NGX ASI gained c.1.31%, to settle at 63,766.72 points, while year-to-date return settled at c 24.42. Buying interests in DANGCEM (+22.00%), and ACCESSCORP (+0.30%) positively impacted the trend in today’s session. Sectorial performance was in the green today, except the Banking Index which declined by 0.17%. The NGX Oil & Gas, Consumer Goods and Industrial Goods Indices appreciated in value by 0.56%, 0.66% and 3.58% respectively. FCMB led the volume charts with 153.88million units, while DANGCEM led the value charts with ₦ 35.81billion.
Outlook: We expect the bullish sentiment to linger tomorrow.
Foreign Exchange
FMDQ’s I & E rate appreciated to $/₦742.93 as of today, compared to $/₦795.28 recorded yesterday. NAFEX rate printed at $/₦790.80 as of July 17, 2023.
Outlook: We expect rates to swing sideways in the interim.
Commodities
Oil prices rose in early trade on Tuesday after falling the previous day due to weaker-than-expected Chinese economic growth, as investors anticipated a probable tightening of US oil supplies. Brent oil prices appreciated by c.0.08% to $78.56pb, day-on-day, while WTI depreciated by c 0.13% day-on-day to settle at US$74.25pb. Spot Gold appreciated by c. 0.34% day-on-day to close at US$1,963.10 per ounce as of report time.
Outlook: We expect oil prices to rise, as supplies tighten from the United States.